DTC Provides Important Regulatory Tools While Benefiting Consumers and Producers
For craft wineries, Direct to Consumer (DTC) shipping has been vital to stay in business and provide consumers with more choices. And by using an e-commerce platform, producers can ensure they are participating in a system that enhances compliance in ways that are both good for the industry and state regulators.
Using an e-commerce system addresses important concerns for regulators, including: 1. Age Verification 2. Licensing and Compliance 3. Tax Collection 4. Auditability, having a system that tracks sales from start to finish and creates a complete audit trail. Think of the four areas as ALTA.
For small wineries, it is vital to keep our markets thriving, open, and fair to help all producers compete on a level playing field where consumers have the maximum choice and are not restricted by limited offerings in wholesale markets.
Consider the following points:
Age Verification: Electronic, pre-purchase age verification has proven to be highly effective in preventing minors from buying alcohol. Many long term state studies have shown brick and mortar locations to be deficient in verification.
Licensing and Compliance: For more than 15 years, compliance companies have helped wine producers and other handlers of alcohol meet rigorous licensing requirements to comply with state and federal laws. Over the years, the industry has matured to meet evolving requirements and demonstrated a proven track record of success.
Tax Calculation and Collection: Dating back to the 21st Amendment, the proper calculation and collection of taxes is paramount to state regulators and revenue departments. Modern software makes data collection and reporting routine for companies and easier for regulators to combat the underground economy. The rise of Marketplace Facilitators since 2019 is ensuring tax collection and remittance.
Auditability and Tracking: Shipping and delivery companies, such as FedEx and UPS, have modernized with the DTC industry and provide accurate tracking of products throughout the process, as they are delivered, returned, damaged, or lost.
As consumer habits change, the debate over DTC expansion has given e-commerce platforms such as Vinoshipper an opportunity to demonstrate how technology will help serve people more safely while giving government regulators better tools for effective oversight and allowing small producers to survive and thrive.